Posted
by
timothyon Thursday September 25, 2008 @01:58PM
from the new-ventures dept.

qazsedcft writes "In a move the company is billing as its first foray into the hardware business, Oracle Corp. said Wednesday it will begin selling server computers that come with its database software pre-installed."

Why wouldn't Oracle just throw in the hardware with the costs of the license?

Hardware is so cheap and the licenses so expensive that you'd think the sales guy will be on the golf course with the CEO saying, "Tell you what, you buy the unlimited user license for your website for four processors and we'll have our guys build the servers, install the software (really just a drive image) and deliver it ready to go to your datacenter, all for free."

The insurance company makes a lot of acquisitions, and the first step is always unloading everything the new company does that isn't insurance, no matter how profitable they've been.

Where've you been the past few years? Insurance companies used to be forbidden from operating in certain other areas. Not so anymore... look at Prudential. They have diversified bigtime.

As for Oracle in particular... this is not an unrelated product. Providing hardware for their software could potentially reduce their support costs significantly. I haven't seen any numbers, and I'm only slightly familiar with Oracle's pricing structure for support, but it seems to me that some of their clientele might prefer one-stop shopping... as they then save money on installation costs.

So rather tha seeing this as Oracle moving away from their core business, maybe a better perspective would be to think of this as supporting their core business.

One other thing to note -- Oracle's core business is no longer software, it's services. While the services business is largely dependent on their software offerings, take a look at their recent revenue figures... and take a bigger look at where their projected growth is.

The posted story didn't have many details. Look here for more [pythian.com]. As you can read, nothing inside is that crazy, but its a nice configuration with massive storage and massive bandwidth. Its not just a simple 1U proliant with oracle.

That's pretty funny. You don't understand that most of the hardware you just mentioned is considerably cheaper to the manufacturer than what you pay (Aside from some of the stuff in the Sun boxes...but those aren't really necessary for a lot of businesses that would still have uses for Oracle). I would say the majority of the cost is for support and to fatten their wallets. Enterprise-grade anything has insane profit margins.

SANs are expensive because of the software/firmware that runs the controllers, failovers, etc. The hardware in them is relatively cheap...most of the components are standard, it's just the controller board that gets custom-designed, which is still not an overly expensive process. (SANs use the same chips that are in $1-2k NICs from Alacritech and others, and even cheaper RAID controllers from LSI, etc.)

Now I don't see making it free, but it would be a good way for them to make it seem like they are giving huge discounts. Take that 40k SAN and cut the cost to 10k and break even. Maybe on lower-end servers it would work...you can easily spec out a throw-away Supermicro for $2k that could handle a hundred or so DB users without flinching.